(2) On the prescribed date for each public service agency to which this section applies subsections (3) to (6) shall apply to that agency.

(3) Every public service agency shall prepare accounts in respect of each financial year and shall send them to the Comptroller and Auditor General.

(4) The Comptroller and Auditor General shall examine accounts sent to him under this section with a view to satisfying himself--

(a) that the accounts present a true and fair view, and

(b) that any public money provided to the agency has been expended for the purposes intended by the body by which the money was paid.

(5) Where the Comptroller and Auditor General has conducted an examination of accounts under subsection (4) he shall--

(a) certify them and issue a report,

(b) send the certified accounts and the report to the Treasury, and

(c) if he is not satisfied of the matters set out in subsection (4)(a) and (b), he shall report to the House of Commons.

(6) The Treasury shall lay accounts and reports received under subsection (5)(b) before the House of Commons.

(7) Subsections (3) to (6) do not apply to any body to the extent (but only to the extent) that any of its accounts are or become subject to audit--

(i) by the Auditor General for Scotland, or

(ii) by the Auditor General for Wales.

(8) The appropriate Minister may by order designate a public service agency as one in relation to which this section does not apply for so long as the designation remains in force.

(9) An order under subsection (8) shall be made by statutory instrument, and shall not be made unless a draft of the instrument has been laid before and approved by resolution of the House of Commons.

(10) "Appropriate Minister" means, as regards any public service agency to which a designation relates ("the designated agency"), a minister in the department responsible for that agency.

(11) "Public service agency" means a body--

(a) which is not a government department or comprised within a government department,

(b) which exercises public functions of a governmental nature which might otherwise fall to be exercised by central government, and

(c) as respects which an accounting officer has been designated,

but does not include a public service agency which is a company registered under the Companies Act 1985.

(12) In this section "prescribed date" means, as regards each public service agency, the first day of the first full financial year of that agency commencing after the expiry of the term of appointment of the person who is the auditor of the agency when this section comes into force.'.-- [Mr. David Davis.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker:

With this, it will be convenient to discuss Government amendments Nos. 32 and 33.

The set of bodies which exercise public functions of a governmental nature which might otherwise fall to be exercised by Government.

I cannot say why the Comptroller and Auditor General does not audit those NDPBs . . . We accept that there is no apparent rationale to some of the anomalies.

The other bodies in the category were the Football Licensing Authority, the Gas Consumers Council, the British Hallmarking Council, the Museum of London, the Oil and Pipelines Agency and Food from Britain. It is clear that progress must be made to bring at least those eight executive non-departmental public bodies under the CAG's remit.

We can debate whether it would be right to appoint the Comptroller and Auditor General as auditor of such bodies.--[ Official Report, Standing Committee A , 20 January 2000; c. 288.]

A case has already been made for saying that although some bodies may be funded by levy, it is nevertheless money from the public and it is Parliament's job to decide on the amount. It is a good reason for supposing that it is also Parliament's job to ensure that that money is being properly used; how do we know at what level the levy should be set in the following year if we are not sure that the levy set in the previous year was properly used?--[ Official Report, Standing Committee A , 20 January 2000; c. 309.]

as well as auditors who deal regularly with commercial organisations.--[ Official Report, Standing Committee A , 20 January 2000; c. 289.]

there is little argument to suggest that some special expertise is hidden away in the private sector that is not available to the Comptroller and Auditor General.--[ Official Report, Standing Committee A , 20 January 2000; c. 310.]

We do not have a one-size-fits-all policy--[ Official Report, Standing Committee A , 20 January 2000; c. 288.]

The Government do not view it as sensible to tackle the issue piecemeal.--[ Official Report, Standing Committee A , 20 January 2000; c. 300.]

there is already an auditor, who has been appointed for five years.--[ Official Report, Standing Committee A , 20 January 2000; c. 299.]

if the Comptroller and Auditor General is concerned about what is happening in an NDPB, he can investigate and make a report."--[ Official Report, Standing Committee A , 20 January 2000; c. 289.]

He does indeed have access to all executive NDPBs by virtue of administrative agreement struck only after years of pressure from the Public Accounts Committee. However, access is a poor substitute for audit, for reasons that I touched on in answer to my hon. Friend some moments ago.

The Chief Secretary to the Treasury said to the Public Accounts Committee that he was willing to examine the question of amending the legislation to enable the Comptroller and Auditor General to audit those limited companies within the Government's purview.--[ Official Report, Standing Committee A , 20 January 2000; c. 301.]

the Committee believes that Parliamentary accountability will be enhanced if the Comptroller and Auditor General is able to audit on behalf of Parliament all public bodies carrying out central Government functions, and has statutory access to bodies and contractors delivering services on behalf of Government departments . . . We believe in the principle that the Comptroller and Auditor General should have full access to all Government expenditure.

the Comptroller and Auditor General shall have free Access, at all convenient Times, to the Books of Account and other Documents relating to the Accounts of such Departments, and may require the several Departments concerned to furnish him, from Time to Time, or at regular Periods, with Accounts of the Cash Transactions of such Departments respectively . . .

it seems easier to die in battle than to tell the truth in politics.

he who has the impatience to interrupt the words of another seldom has the patience rationally to select his own.

There is nothing so bad or so good that you will not find Englishmen doing it; but you will never find an Englishman in the wrong.

This will put departments on to a similar accounting basis not only to commercial organisations but to many other parts of the public sector.--[ Official Report , 30 November 1993; Vol. 233, c. 931.]

The Comptroller and Auditor General shall examine accounts sent to him under this section with a view to satisfying himself--

(a) that the accounts present a true and fair view, and

(b) that any public money provided to the agency has been expended for the purposes intended by the body by which the money was paid.

As my hon. Friend the Member for Eddisbury (Mr. O'Brien) eloquently said, that is a mirror of what happens in commercial organisations when they are audited by chartered and certified accountants. It is important to audit not only the funds flow but--as my hon. Friend the Member for Guildford (Mr. St. Aubyn) pointed out--the difference between expenditure on capital amounts and revenue amounts, because investments in capital amounts accrue value and are not amortised. If one confuses the two, it is all too easy to confuse the general public in persuading them that the state of the economy is better or worse than it is.

The general trend of the changes proposed--

is to give greater discretion to the Comptroller and Auditor General as to the extent of his audit, and to make his measures more elastic.--[ Official Report , 5 August 1921; Vol. 145, c. 1883-84.]

Every public service agency shall prepare accounts in respect of each financial year and shall send them to the Comptroller and Auditor General.

That is in new clause 2(3). How can the hon. Gentleman not support that? He apparently is not happy with the regime left by the previous Government. It is quite clear that several of us are astonished by the lacunae. So why does he not support it?

We urge the Government to extend this [audit] to all existing executive non-departmental public bodies.

We consider that it is questionable, in principle, whether those whose accountability is being examined should appoint the external auditor of non-departmental public bodies. We recommend that the Bill should address this issue by specifying that all such bodies established in the future will be audited on behalf of Parliament by the Comptroller and Auditor General. Also the Bill should amend existing legislation to appoint the Comptroller and Auditor General as auditor to those bodies for which he is not already statutorily appointed.

Despite many years of negotiation since 1991 with the Department and the Housing Corporation, the Comptroller and Auditor General can still only examine housing associations that volunteer to submit to his scrutiny although these are unlikely to be the bodies where problems arise.

to provide assurance to the Committee that public funds raised through the national lottery were being handled properly and correctly passed on to Government by Camelot. Its auditors refused to pass on the information he needed.

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